EFC (Expected Family Contribution) or SAI (Student Aid Index)?
What are the assets included in the calculation in FAFSA:
- 529s (Parent Assets),
- Bonds, Checking,
- CDs,
- Mutual Funds,
- Other Real Estate,
- Savings,
- Stocks,
- UTMA/UGMA & Trusts.
What are Excluded in the calculation in the FAFSA:
- 401K,
- Annuities,
- Family owned small business and Farms (2024-2025 + will be included),
- Home Equity,
- IRA,
- Life Insurance Values,
- Pension,
- Personal Property.
The EFC (Expected Family Contribution) is the amount of money family is expected to contribute towards COA (cost of attendance).
| Parents’ AGI (Adjusted Gross Income) + Untaxed Income & Benefits | – | Income Allowance , Fed Income Taxes, SS (Social Security) Taxes, State Taxes, Employment Exp. Allowance | x 22 – 47% (assessed at a variable rate) | = | Parents’ Contribution from Income |
| Parents’ Assets | – | Asset protection Allowance | x 5.64% (assessed at a variable rate, no asset protection allowance as of 2023-2024, FAFSA) | = | Parents’ Contribution from Assets |
| Students’ AGI (Adjusted Gross Income) + Untaxed Income & Benefits | – | Income Allowance, Fed Income Taxes, SS (Social Security) Taxes, State Taxes | x 50% (assessed at a flat rate) | = | Students’ Contribution from Assets |
| Students’ Assets | – | x 20% (assessed at a flat rate) | = | Students’ Contribution from Assets EFC (Expected Family Contribution) |
In the EFC calculation: The family’s home/farm (if family lives in the home/farm) are not assessed. Business assets are not counted if the owner employs 100 or fewer full time employees. Above 100 employees are assess at a special net worth adjustment. Parental asset protection allowance is based on the age of the older parent. The allowance increases with the age of the older parent.